SNS Reaal CDS decision might have broad implications

02/12/2013 | Wall Street Journal, The

ISDA's Determinations Committee is meeting to decide whether some credit default swaps will be triggered by the Netherlands' nationalization of SNS Reaal. Because the bank was nationalized and its bonds expropriated, there cannot be a bond auction to determine the level of compensation from the swaps. These issues are similar to ones that would be raised by so-called bail-in laws being considered in Europe, and the determination could have wider implications for investors in European bank bonds.

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